SOUTH PITTSBURG, Tenn. -- City administrators recently discovered that nearly $20,000 they had spent on streets and sidewalks won't count toward the $80,000 in matching funds required for a $400,000 grant.

"What's happened here is the state has come back and said that we can't use any soft dollars from work that we've already done to reach that 80/20 match," City Administrator Bently Thomas said.

Mayor Mike Killian said the city can't use the engineering fees it has paid on the projects to meet the 20 percent match for the Community Development Block Grant, either.

"In the past, we would have been able to use that engineering money to count toward the $80,000," he said. "I don't know if [the state] just doesn't have the money, or they're having a weeding-out process."

South Pittsburg Utilities Manager Donald Blansett said he hoped the ruling wasn't the state's "final answer."

"I really don't like that answer," he said. "[The state] told us that we could use that, and then came back after we'd already spent the money and turned around and told us that wasn't allowed. Not allowing the engineering expenses doesn't make sense."

Killian recommended that the city continue the projects even though coming up with the matching funds might be a challenge.

"I say go along with it," he said.

The projects include work in a small part of downtown South Pittsburg, but are mostly located in the Richard City area.

The South Pittsburg City Commission voted unanimously last week to accept the grant and continue the infrastructure projects.

Killian said the city's sales tax revenue has grown steadily over the past two years, but he doesn't want to depend on that for the $80,000 match.

"I'd hate to leave $320,000 worth of work on the table, because the Richard City area needs the infrastructure work worse than any other neighborhood in town," he said.

Ryan Lewis is based in Marion County. Contact him at ryanlewis34@gmail.com.